I have decided that I want to go ahead with the AGPL license for my software. What is the procedure that one has to go through in India so that the LICENSE holds in court. Will a LICENSE file along with code be enough or do we have to register it at any other office or organization?
Under Indian law you own copyright in your code as soon as it is created, without any need for registration formalities. You are then free to license other people to use that code as you see fit. The AGPL is one way of doing this.
So the answer to your question is that you don't need to register anything. Just put copyright messages at the top of your source code files (not really necessary, but it helps clarify which files are included) and distribute the code with the license file.